Trade data volatile but appears to be improving

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  • Trade data is especially volatile, and the weather-related distortions make it difficult to draw any concrete conclusions
  • The underlying trend appears to indicate an improvement in trading conditions, tying in with survey data reports of strong export orders
  • The deficit should continue to narrow in the coming months, helped by the weak pound and improving economic conditions in the UK's main trading partners

"The trade data is especially volatile, and the weather-related distortions make it difficult to draw any concrete conclusions. However, the underlying trend appears to indicate an improvement in trading conditions, tying in with survey data reports of strong export orders such as those from the BCC and the PMI for manufacturing.

"The deficit should continue to narrow in the coming months, helped by the weak pound and improving economic conditions in the UK's main trading partners.

"It also looks like the impact of the car scrappage scheme is fading. While there might be a small up-tick in March as consumers take advantage of the remaining few weeks of the scheme ahead of the new vehicle registration release, the recent high levels of car imports are expected to wane. In addition, consumers continue to face headwinds with unemployment remaining high and fiscal tightening on the way. This should help to dampen any pickup in consumer imports."

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